Green and Circular Capital Investments in Production Industry

Abstract: As the concept of sustainability and environmentalism is growing due to new customer demand and regulations, production industry is facing extreme challenges in rethinking their processes and implement sustainability measures. Several companies are taking reactive measures where changes are made on the shopfloor in form of altered operations. However, preventive measures are lacking in many cases since green production system design is being overlooked due to neglection of environmental improvements in capital investment projects. The objective of this thesis is to explore the current state of environmental sustainability in a production company on its capital investment project level and see how the sustainability work relates to corporate sustainability strategy. Also, the objective is to acquire an understanding of what approaches could be included in the design phase of a capital investment to make it more environmentally sustainable by design. The purpose is to construct a green design process for designing sustainable capital investments, both practically through an interactive case study, and through a conceptual guideline. An interactive case study has been conducted at AstraZeneca in Södertälje, Sweden, to achieve the objective of this thesis. Three other companies have been included for benchmarking, and thus best practice have been acquired. A structured literature review was also conducted with the purpose of acquiring knowledge on what possible lean and green, and circular approaches are suitable for designing capital investment projects. Sustainability is a well implemented concept on corporate level in those companies studied in this thesis. However, in relation to capital investment projects as part of production system design, the concept of sustainability is somewhat lagging, suggesting that the vision on becoming a green organization is recognized on higher managerial level, but not perceived on project level. This thesis provides the reader with a conceptual guideline which guides practitioners in what possible sustainability tools could be used in different stages of capital investment design to enhance circularity. A green design process for how to improve environmental sustainability in capital investment projects was also developed and tested practically at AstraZeneca, Södertälje. Production companies require an organizational cultural change towards a green mindset that allows them to invest in often expensive and resource demanding activities that follows from implementing green processes. Applying an approach of system thinking in capital investments by including green activities that reaches all organizations within the company (such as purchasing, operations, and maintenance) are advised. Production system design is generally neglected in industry and research which can be explained by the lack of structured development processes connected to capital investments. Neglecting production system design is occurring even though it is important because of the high costs and problems in altering production systems in hindsight.